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Egypt's Orascom Telecom said Monday it is selling its entire 50 percent stake in its Tunisian subsidiary to Qatar Telecom in a deal valued at $1.2 billion.
The Cairo-based mobile phone giant said in a statement the sale of its stake in Orascom Telecom Tunisie is part of its push to strengthen liquidity. It said the deal would be completed in January.
OT's parent company, Weather Investments SpA, had agreed in October to a merger with Russia's VimpelCom Ltd. The roughly $6.5 billion deal would create the world's fifth largest mobile telecommunication service provider by subscribers.
Orascom has been working to sell off some assets as part of the merger.
Qatar Telecom, which goes by the name Qtel, said its Wataniya Telecom subsidiary is acquiring the stake in partnership with Princesse Holding of Tunisia. Qtel's Wataniya division already owns 50 percent of the Orascom Telecom Tunisie.
The deal will give Qtel control of Tunisiana's board.
Qtel said Wataniya will pay for the deal with a combination of cash and debt. It didn't say how much it planned to borrow.
Qtel's chairman, Sheik Abdullah bin Mohammed bin Saud Al-Thani, said in a statement the deal is in line with the company's plan to become one of the top 20 telecom companies in the world in part boosting its ownership stake in assets with further growth potential.
"We are rightly proud of our record of financially disciplined expansion, and we are pleased to have secured the additional Tunisiana stock at a good price," he said.
Qtel counts 68 million customers and has operations in 17 countries in the Middle East, North Africa and Asia.
OT has operations in several African and Asian countries and has over 100 million subscribers.
AP Business Writer Adam Schreck in Dubai contributed.